In which of the following circumstances can a firm best achieve economies of scale?

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that firms can gain by increasing their levels of production. Spreading the costs of investments in plant across many sales is a prime example of achieving economies of scale. This reduces the per-unit cost of production, allowing the firm to increase output and lower prices. Option B refers to better quality products, which may result in higher prices, while Option C refers to investing in research, which may lead to increased customer satisfaction but may not necessarily result in cost reductions. Option D refers to highly customized products for a niche audience, which may not be mass-produced and therefore may not achieve economies of scale.

In Which of the Following Circumstances Can a Firm Best